By Murray Coleman

Even though hedge funds lost on average 1.2% in May, that was better than most of their underlying benchmarks, says independent market researcher Eurekahedge.

Managers in all regions outperformed, according to a report sent to clients today.

Still, May was the first negative month for hedge funds since June 2010. But Eurekahedge points out that the MSCI World Index lost much more, 2.5%, in the month.

Downside performance of hedge funds was limited to less than 2% on a regional basis. For example, Latin American hedge funds were actually up 0.42%, beating the MSCI EM Latin America Index, which was down 3.18% in the month.

Long/short equity and multi-strategy funds were up 0.54% and 0.44%, respectively. Distressed debt hedge funds produced a ninth-straight month of positive returns.

Hedge funds attracted net positive asset flows of $8.1 billion in the month, bringing the total asset flow for the year to $113.8 billion.

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